Sound recordings were first brought within the scope of federal copyright protection beginning in 1972. Sound recordings made before February 15, 1972 are protected by various state laws. State law protection for these legacy recordings will continue until 2067, at which time all state protection will be preempted by federal law. Even though these recordings are protected by state law, some digital music services were using them without paying royalties or otherwise getting permission. SoundExchange estimates that non-payment for pre-1972 recordings cost artists and labels well over $60M in royalties in 2014 and more than $70M in royalties in 2015.
In 2014, several copyright holders, including Flo & Eddie of The Turtles (“Happy Together,” “She’d Rather Be With Me”) and a group of major and independent record labels, took legal action to defend their rights in their pre-1972 sound recordings under state statutory and common law. They allege that SiriusXM and Pandora refused to license and pay royalties for the use of pre-1972 sound recordings, violating state laws. SoundExchange filed its own lawsuit against SiriusXM as well, which separately addresses Sirius XM’s underpayment of royalties under federal law. Many of these lawsuits have resulted in settlements between the copyright owners and the services that had been withholding royalty payments, but these settlements did not create certainty in the law about the protection of recordings from this iconic era of music.
Legislation to Protect Legacy Recording Artists
In 2014, SoundExchange launched Project72, a campaign to ensure fair pay for artists who recorded their music before 1972. One result of the campaign was legislation introduced in the House of Representatives during the 113th Congress. That bipartisan legislation, called the RESPECT Act, would have required digital services to pay for all the music they play, regardless of the year it was recorded. In the 115th Congress, the RESPECT Act is now part of the Fair Play Fair Pay Act, H.R.1836, introduced by Representatives Jerrold Nadler (D-NY), Marsha Blackburn (R-TN), John Conyers (D-MI), Darrell Issa (R-CA), Ted Deutch (D-FL) and Tom Rooney (R-FL).
UPDATE on Legislative Action
In July 2017, Representatives Darrell Issa (R-CA) and Jerrold Nadler (D-NY) were joined by the original sponsors of the Fair Play Fair Pay Act in introducing the Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society Act (CLASSICS Act), H.R.3301.
- Closes Pre-72 Loophole & Protects Legacy Artists
This legislation is an update to the pre-72 provisions in the Fair Play Fair Act, which only covered recordings streamed by non-interactive services. This bipartisan legislation would provide much needed clarity to artists and digital services by establishing federal protection for pre-72 sound recordings. Under the terms of the bill, digital radio services will be authorized to play pre-72 sound recordings under the same statutory license terms applied to sound recordings made after 1972, or under a direct licensing agreement with the copyright holder. Under either option, artists will always directly receive 50% of the royalties.
- Services Receive Protection from Liability
Services that adhere to the terms of a direct licensing agreement or statutory license for pre-72 recordings, immunity will be provided against state law claims of subsequent transmissions. Such immunity will extend to those services for claims arising from past unauthorized transmissions if they also pay the statutory rate for pre-72 sound recordings used during the 3 years prior to the bill’s effective date. Freedom from liability provides peace of mind in business certainty.
- Bipartisan and Cross-Industry Support
The bill enjoys broad support from both music creators and digital service providers. Organizations that have joined SoundExchange in expressing support for the new legislation include: American Association of Independent Music (A2IM), the RIAA, Pandora, the musicFIRST Coalition, the Internet Association, the GRAMMYs, SAG AFTRA, American Federation of Musicians, the Content Creators Coalition, the Future of Music Coalition, the Rhythm & Blues Foundation, and the Living Legends Foundation. Read the joint statement of support from Pandora, SoundExchange and RIAA here.
For more information on the legislation, please click here to read SoundExchange’s one pager.